Sell-off by nPower to create new energy giant

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A new player in the UK energy market is to be created after RWE npower agreed a deal to offload 770,000 customer accounts.

They form part of npower’s Electricity Plus and Gas Plus subsidiaries, which were sold yesterday 
for £218m to Telecom Plus, a supplier of energy and telephony services trading as Utility Warehouse.

The deal is the result of new rules from Ofgem limiting the number of tariffs on offer to domestic customers to a maximum of four.

As Utility Warehouse already manages the brands on behalf of npower, the sell-off will allow 
the two companies to continue to offer their customers up to four tariffs under their respective brands.

It will also meet demands for greater competition in the industry at a time of rising energy prices. Npower, which is part of Germany’s RWE Group, currently has around 5.4 million customer accounts.

RWE npower chief executive Paul Massara said: “In one move we have helped to create the biggest independent competitor in Britain’s household energy supply market.

“This is good for competition and good for consumer choice. Today’s announcement shows that Britain is well on the way to having a Big Seven rather than a Big Six.”

Utility Warehouse will continue to receive its gas and electricity from npower under a new 20-year energy supply agreement. This should enable it to provide more competitive tariffs to its customers.

The company said the deal boosted its medium-term target of supplying gas, electricity, fixed-line telephony, mobile telephony and broadband to more than one million customers.

The deal, which will not result in any change to customer service and contracts, is expected to be completed by early January.

The news comes 24 hours after it was claimed that energy companies are to be forced to give consumers a breakdown of their costs.

Energy and climate change minister Baroness Verma said information on bills would include the cost of complying with government environmental programmes.

Other items to be listed included wholesale energy costs, network and distribution costs and energy company operating costs and profits.

Lady Verma said four of the biggest suppliers already provided a breakdown of their costs on consumer bills.

As a first step, the Government would be seeking a voluntary agreement with the other suppliers to ensure they also provided a breakdown.